I would definitely recommend using Mediamonkey to fully organize all your music to your liking, metatags, albumart and all.

After using or not using a program to organizing your music, open up Zune and let it do it's work to scan your media. Create your playlist with it.

Once done before you sync make sure that you turn off "Connect to Xbox Music" option in the Music Hub on your device. This is to maintain the hard work that you've put into your metatags or that it'll maintain your library. You can re-enable this option once you sync though!

Use Windows Phone app for desktop (Preview 3) ( It has seem to me anyway that it's fully syncing all the album artwork and everything else correctly now ), select your artist / songs / playlist to sync. Once you've synced, all or almost all your album art will be there.

If some of your album art are missing, use MPAtoolto fill out the missing artworks.

For artist backgrounds, you can re-enable "Connect to Xbox Music" to grab them. Just play a preview song from the artist and it should tag. If not just use MPAtool to do it.

If you do use MPAtool to tag your album art / artist background it will create a song called MPATool Dummy, you can delete them very easily. Go to your Music, slide over to genre, select MPATool Dummy or so, and select all of the files and delete (it will not affect anything).

Also if you have an artist background tagged you will not be able to change it unless the artist is unsynced from your device to remove that image data then re-sync and add a different one instead.

I have uploaded my HD artist backgrounds if you would like to use them here Artist Background Skydrive. They are sized at 1900 x 1280. I also have 300 HD album artwork as well if you'd like me to upload them there too.

Hope it all help!

Dead mods, there has been many people asking for help in this subject and I've pretty much replied to all of them and decided to write this up for anyone who is too lazy to do a search.

Ive been using itunes and syncing with windows preview 3,ive not had any problems only the length of time it takes to sync 16gb of music (about 2hours)

Really? o.O that is a long time to sync.

The reason why I don't mention iTunes to organize music or recommend is that it does not save your album art properly. I've had many experience with iTunes making my album art disappear constantly even after reorganizing my library.

It's actually pretty disgraceful for MS that a thread like this even needs to exist. I love almost everything about my WP8, but I can say with absolute certainty that Xbox Music is an abysmal failure and a complete nightmare to use.